DRM, Pricing and How We Can Help Piracy End Itself

Books4Spain is a European online specialist bookshop that sells English-language books and e-books about, or set in Spain. We were recently invited by the digital publisher Open Road to review The Winemaker (La Bodega), the bestseller by Noah Gordon, as it meets our criteria perfectly — it is set in Spain, and covers an interesting topic and era: wine, the Carlist Wars and the assassination of General Prim.

It’s a great book on many levels and one we would dearly love to sell but, as a European-based business we currently source all of our e-books from Gardners Books, the UK’s leading wholesaler. Currently Open Road titles are not available via Gardners, so we can’t sell The Winemaker, though hopefully this is being resolved as I write this.

Nevertheless, it also raises one of the big three issues which is causing consternation and confusion in the publishing industry — whether to DRM or not to DRM (the other two issues being the agency model and territorial rights). It’s already difficult enough for customers to find, purchase and read e-books in the manner in which they would like, as the Open Road issue above illustrates. If independent retailers hope to compete in an online marketplace, and publishers hope to continue to work with a wide variety of retailers, we must not construct any extra barriers such as DRM.

Focusing on DRM, in our experience, in an increasingly diverse “e-reading” environment — where the same e-book can be accessed on different hardware devices, using different software platforms and also via cloud-based services — DRM militates against giving consumers easy access to e-books.

It is no wonder that Amazon, with a dominant position in online book selling and very deep pockets, has used its proprietary Kindle format and device to dominate the e-book business. Amazon does apply DRM to Kindle e-books, but buying a Kindle e-book is such a seamless experience that most consumers neither know nor care that their book is DRM-protected — until they want to share the book or access it on another device, and discover they have to do it on Amazon’s terms.

Right or wrong, in a rapidly evolving digital publishing world, the “Big Six” took the view from the outset that their e-books had to have DRM to protect against “piracy” and that e-book prices needed to be at least the equivalent of the hardback (and more recently the paperback) version. What have the consequences been?

Piracy has flourished — whether by people who have cracked the DRM, or those who merely scan the relevant books and make them available on torrent sites for free. Less tech-savvy customers, who aren’t trying to pirate the book, run up against DRM barrier in their normal use, creating a frustrating experience and resulting in, our experience at least, lost sales.

There are a number of specialist publishers, e.g. Wiley, who have successfully operated DRM-free e-book businesses but until April of this year, no leading trade publisher had taken such a step. After much speculation, just before the London Book Fair, Pottermore launched the official e-versions of the Harry Potter books — with social DRM, essentially a watermark that allows the book to be tracked but does not directly restrict copying, sharing, printing, etc. (though versions sold via other e-tailers, eg. the Kindle store, do have “hard” DRM).

CEO Charlie Redmayne has admitted that Pottermore did this with enormous trepidation and that for the first few hours “free” Harry Potter e-books were appearing on many sites, but then there was a “consumer”-led backlash to remove the pirated books (or for other consumers to not use these sites to get the official Harry Potter e-books free). What appears to have happened, and this confirms my own thinking about DRM, is that consumers were saying, “You gave us what we wanted at a reasonable price and so other consumers should be prepared to pay for these e-books.”

As evidenced by the success of Kindle, this puts price and convenience, and not DRM, bang in the middle of the “piracy equation” — price things fairly and make them easy to get and use, and piracy will take care of itself. It is worth pointing out that pirated versions of the Harry Potter books have been freely available for a number of years but consumers were prepared to buy the official versions if the price was right and they were easy to download.

The (early) evidence from Pottermore’s experience suggests that social DRM with proper pricing is the way to go. I sincerely believe this to be correct — within two years very few e-books will be sold with “hard” DRM. Publishers like O’Reilly already offer .mobi files that are directly compatible with the Kindle. If more publishers went this route, they could circumvent Amazon as retail channel, while still making books available to consumers with a Kindle.

When (not if!) we list The Winemaker e-book, the biggest barriers to selling it will be the price and DRM. If Books4Spain could sell ePub and .mobi versions of The Winemaker with social DRM at a “sensible” price, our sales would be much higher. The challenge facing publishers is therefore to find the right pricing, marketing and distribution mix for e-books, and in that process, DRM should certainly be consigned to the dustbin. This means publishers need to focus on “servicing” and supporting independent book shops, such as Books4Spain, to break the hegemony of Amazon, Apple and Google as online book retailers.

Rod Younger is founder of www.Books4Spain.com, an online bookshop specialising in English language books and e-books about, or set in, Spain.